Saturday, November 10, 2012

Robert Reich: Tax the Rich!!

Of note, the things not discussed by Reich:

1. Government involvement in healthcare stifles creativity in the field, raises prices and creates power centers that the bad guys eventually control, which will result in bad guy medicine versus choices on our own. Thus, there is no need to raise taxes for government healthcare, the country would be better off without government healthcare.

2. Reich fails to distinguish between two types of rich, those that have become rich by providing products and services to consumers and those who have gotten rich by cozying up to government and creating advantage for themselves with the help of government guns.

We need more people who get rich by providing products and services to the consumer and we can eliminate the others by eliminating government intervention in the marketplace.

3. Reich completely fails to understand the role that the rich play in providing capital to the markets, which results in a greater standard of living for us all. Without that capital, our standard of living will decline and decline.

Bottom line: Reich is a hater of the rich. He makes no distinction between the various ways people have gotten rich. He appears to have no understanding of the importance of capital, which the rich are in a much better position to provide (if the money isn't taxed away from them) than anyone else.

He is an elitist who thinks the world should be run by his rules, rather than allowing people to make their own choices. And while he personally is close to a midget, don't for a minute think his proposals aren't coercive. He believes his rules (including higher taxes) should be forced on all and that if you simply want to go your own way and ignore his rules, this should be the response:


  1. I'm libertarian minded and don't think that income should be taxed at all. But given that we do have an income tax, I think everyone's income should be taxed equally. Therefore, if it is in fact true that Romney paid less than 14% of his income in taxes, while others with less income were paying more than 14% of their income in taxes, then I think that's unfair. Now, Romney tried to argue that since his income was almost completely categorized as "capital gains" then it is fair that he pay a lower tax rate because the capital from which his income was generated was already taxed once before at another level.

    The problem with this reasoning is that it is a tax on personal income specifically that we are considering, not capital. The means by which one's personal income is generated should make no difference as to the percentage of income tax that is levied from said income. Just because Romney generates his income from capital gains doesn't mean he should pay a lower rate than those who generate their income from labor, gambling, sales, inheritance, etc. All income, to be fair, should be taxed equally, regardless of the method of generation, if an income tax does indeed exist in society.

    1. Fine, tax his personal income the same, but don't tax the corporate income the first time it comes through. Taxing something two times and only reporting the lower amount is extremely dishonest, and that is what the pro taxation types have done all along. If you really want to make sure that the system is "fair" then stop tying taxation to anything. Each person pays the same amount. There is absolutely no possible way to game such a system. Either you pay your bill or you do not. But everyone is assessed the same. We all enjoy equal benefits from police, military, etc., so we can all pay the same amount to cover their costs.

    2. Corporations do not pay taxes, they either pass them to the consumer or they reduce the dividends paid to the shareholders. We, the taxpayers, wealth producers pay in the end.

    3. @ Abbie S:
      "The seemingly common-sense view that a retail sales tax will readily be shifted forward to the consumer is totally incorrect, writes Murray Rothbard. In contrast, the initial impact of the tax will be on the net incomes of retail firms. Their severe losses will lead to a rapid downward shift in demand curves, backward to land and labor, i.e., to wage rates and ground rents. Hence, instead of the retail sales tax being quickly and painlessly shifted forward, it will, in a longer-run, be painfully shifted backward to the incomes of labor and landowners. Once again, an alleged tax on consumption, has been transmuted by the processes of the market into a tax on incomes."
      Full article here:

      Bottom line, taxes don't get "passed on to the consumer." What they do is lower the gain of consumers, while reducing the income of producers.

    4. We need to be careful with statements like 'the initial impact of the tax will be on the net incomes of retail firms'. Most people seem to think companies are like persons, companies are empty boxes, with moneys coming and going out (some 'retained earning' for emergencies) and it has to balance out. I agree with the old master, of course, but in my experience running a small business of 25 people, we know that any new expense will impact either the take-home revenue of my partner and I, or we'll try to pass that on to the consumer. Nothing evil there, someone has to pay...

  2. To me the biggest thing he misses is that none of the major tax increases in the past have solved the deficit problem. Taxes are not the problem; spending is the problem.

    I don't know what the mentally-challenged socialists think happens to the money of the wealthy. They act as if they pile it up in their bedrooms and sleep on it. In reality, no matter what they do with it, it is involved in expanding the economy. Reich is a pawn in a power game to transfer that wealth to the government for the politically elite to buy votes and expand their power and wealth.

    1. Absolutely right. I read car magazines and in an article reviewing the new Ferrari the author basically said that if you make $40K a year and buy on time a car worth $20K it would not be much different for a person who makes $1 mil a year to buy a $500K Ferrari. I thought he was a putz. The financial statement of a person who makes $ 1 mil a year is not 20 times the expenditure in each category of a 40K earner. Sure you might buy a Honda and he might buy a third car fun car, but in general he will consume much less of his income overall and invest a significantly larger portion in productive investments.

      He probably gets around to buying a Ferrari after he has saved and invested enough that his investment portfolio covers the expense of the toy.

    2. Let's keep in mind that there are only 24 hours in a day, for both of them. It would be nice if wealth could buy time - it can to some extent buy leisure time, but the limitation is there nonetheless.
      Automobiles today that are accessible to the masses are loaded with features and comforts that one could only find in the most expensive models just a few years back.
      There is a limit to 'enjoyable' wealth, given the limitations of life, just over a year ago, Steve Jobs would gladly give all his mighty fortune away for a few years of health.

  3. For Keynesians the source of loanable funds for capital is not saving but the Federal Reserve. Keynes considered saving as a drag on the economy.

    Here's a short video about point 2:

  4. Isn't Reich the clown who gets 40k a speech? How about we immediately start taxing former government employees who give speeches at a 90% rate since they are the rich benefiting off the taxpayers from their past position?

  5. The problem is that Reich thinks that people who earn money are rich. Ignoring that people who have money are rich. Raising income taxes just taxes people who earn money. It actually just prevents hard working people from ever becoming rich.

    If you're already rich, you don't care about increased income taxes.

  6. Reich is an idiot and any leftist who buys what he is selling is a "useless idiot."
    is a much better video that explains why taxing the "rich" is not the solution.

    It uses numbers instead of feelings. i.e. if you took all of the profits of Walmart and Exxon-Mobile for 2010, you get $34 billion that gets you about 4 days of federal government spending.
    vs. They can afford it.

  7. The USA collects about 2.35 T in taxes a year, at a rate of about 35% - this means the total taxable income of the country is about 7 T.
    The government(s) are spending upwards of 6 T a year.
    They could take away all of the income from the productive people and that would not suffice.

  8. Mitt Romney pays 35 % profits tax first and then 14% on the dividend so he pays almost 50 % in taxes.

    Plus, he donated about 4 million dollars to charity last year.

    I think Robert Reich should be taxed at 95 % because he can afford it.